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Sheep farming, as many other places in Patagonia, was the main impetus for population settlements beginning in the late 19th century.[citation needed]

Abundant rivers, the seacoast, and good pastures were some of the reasons that fueled population growth. Río Grande was founded on July 11, 1921, when the central government issued a decree recognising this locality as the "Agricultural Colony of Río Grande".

In the beginning, the land was subdivided among a few families, owning large estates until the agrarian reform of 1925. Cattle raising became one of the most important economic activities in the area.

To promote industrial development, Tierra del Fuego is excluded from VAT and federal income tax. As a result, several manufacturing companies, particularly those involving electronic products, have opened factories in this city. One of the most rapidly growing sectors is the production of laptops and netbooks. These products were totally imported until 2006 but by 2010, 42% of the Argentine market for these goods was supplied by firms established in Río Grande and Vicente López. Portfolio investments announced in 2011 plan the production of 6.9 million units in Tierra del Fuego Province, principally in Río Grande.[1]

The city's population has grown rapidly since 1980. Many people have relocated from the northern parts of Argentina and from other countries, such as Bolivia, to work in factories that offer higher wages than other parts of Argentina.

Rio Grande's climate is strongly influenced by the ocean: generally quite cool, and sometimes very windy. It has a subpolar oceanic climate (KöppenCfc) with cool temperatures year round. Temperatures in the warmest months, January and February average 11 °C (51.8 °F) while temperatures in the coolest month average 0 °C (32.0 °F).[2] Precipitation is low at around 330 millimetres (13 in). Also, due to its latitude, the length of the day varies tremendously across the year. Winter days can have as few as seven hours of sunlight, while summer days stretch to twenty hours. Frost occurs throughout the year, and winter temperatures can remain below freezing for relatively long periods of time.[3] During the summer, conditions are generally very windy and cloudy, and nights remain cold. Freak snowfalls can occur even in midsummer.